ADX edges down on thin trading value

Equities on the Abu Dhabi Securities Exchange (ADX) yesterday moved in a restricted sideways range in the absence of fresh buying support. With bleak trading continuing on the bourse, the ADX general index eased 7.55 points, or 0.27 per cent, to end the session at 2803.16 points.

The healthcare segment fell the most, while construction, realty and industrial indices eased over a percent yesterday. The banking and insurance sectors dropped less than 0.50 per cent. Reflecting the weak undercurrent sentiment on the bourse, 19 stocks fell, eight advanced and six closed flat.

Abu Dhabi Islamic Bank bucked the trend yesterday as all other banking stocks closed in the red, and gained 0.61 per cent to close at Dh3.29. Bank of Sharjah fell 0.58 per cent and closed at Dh1.70; Sharjah Islamic Bank dropped 3.06 per cent to end at Dh0.95; United Arab Bank eased 1.23 per cent to close at Dh3.22; and Waha Capital fell 1.32 per cent and closed at Dh0.75. Meanwhile, National Bank of Abu Dhabi disclosed its first quarter results to the bourse.

"The ADX is very weak. Though banking sector results are good, we have not seen any momentum on the bourse ," Wadah Al Taha, a senior financial analyst, told Emirates Business.

"Positive news, such as the new projects launched by the Abu Dhabi government and realty majors such as Aldar and Sorouh, failed to boost the market as anticipated. Also, Nakheel's offer to pay some of its outstanding dues and the opening of the Armani hotel couldn't boost sentiment either, and neither could ," he said.

Shiv Prakash, Equity Investment Analyst (Technical), MAC Capital Advisors, said: "The ADX index is likely to remain in the sideways direction from the supports of 2800 points until the resistance levels of 2820. Both the UAE markets are awaiting a breakout for a clear direction."

All realty stocks fell, with Aldar, RAK Properties and Sorouh shares dropping 0.95 per cent, two per cent and 1.67 per cent respectively to close at Dh4.15, Dh0.49 and Dh2.36. Weak global cues also influenced the market sentiment as the drop in oil prices and Asian stocks, and weak US markets continued to impact trading.

"The current movements on the stock exchange do not match the strong fundamentals of Abu Dhabi. I think the correlation with the US markets is back, though, hopefully, not fully. The US markets are expected to witness a correction soon," said Al Taha.

First quarter results have started hitting the market. Abu Dhabi Commercial Bank and National Bank of Abu Dhabi announced their results for the first quarter. After provisions against bad debts, ADCB's net profit dropped 36 per cent and fell short of analysts' forecasts. The bank has set aside Dh681m as impairment charges for the quarter and this is significantly higher than the previous corresponding profit of Dh353.7m.

The first quarter results have not influenced trading as much as expected.

"Some results are not even read by investors, or probably their reaction is very slow," said Al Taha. "The market's behaviour is not based on fundamentals, but on requirements and a functional approach. This pattern is repeating and will continue as long as there's no clarity. I have my doubts, which are hardening, about the selling behaviour in select stocks. This is nothing, but short selling," said Al Taha.

A listed bond instrument, NBADCNO316, fell 8.96 per cent to Dh71 on Monday and recovered 9.84 per cent to Dh78 yesterday. (Sreenivasa Rao Dasari)

Restricted movement in GCC

Stock markets in the GCC continued to move in a very restricted range yesterday with movements on either side being less than a per cent. The region is suffering a lack of triggers that could take trading to the next level.

The Saudi Arabian exchange, the DFM, the ADX, Qatar and Muscat all dropped, while the Kuwaiti and Bahraini bourses closed marginally higher. Banking stocks put the Saudi Tadawul under pressure as the Al Rajhi Bank and SABB stocks eased, while the Kingdom Holding stock also witnessed speculative selling.

DPW lisitng

DP World, a part of Dubai World, informed Nasdaq Dubai that its shareholders have approved an amendment enabling the company to list on the London Stock Exchange. The AGM was held on Monday.

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